Is a soft landing in sight?

by Brian Clark

The global economy is a study in contrasts. Throughout 2023 — a year when the United States and Europe notched their highest interest rates in two decades — unemployment hovered at or near its historic lows. Business leaders entered last year fearing the worst. Yet, by and large, their predictions have yet to pan out; in many corners of the world, GDPs grew compared to 2022.

Through the fog of contradictory information, the labor market has been a bright spot. Here in the U.S., where economists at the Federal Reserve have spent the better part of two years carefully engineering a soft landing, their work might finally be paying off. The economy continues to deliver month after month of strong employment data, while a slowdown in the growth of consumer prices is pointing to at least three rate cuts in 2024. It’s a sign sure to please U.S. employers that, just a year and a half ago, were forced to make drastic spending cuts as inflation soared to its highest level in 22 years.

A soft landing could also resolve two of the most vexing and interrelated challenges facing hiring managers: labor market tightness and pay competition. On one hand, it is expected to translate to fewer job openings, meaning that hirers should face less pressure in the coming years as they jockey to fill vacant positions. On the other hand, as openings continue to ease, so too should wage growth, which has slowed to a pace not seen since June 2021 — back when we were at the height of the Great Resignation.

No one has a crystal ball, and if we’ve learned anything over the past four years, it’s that conditions can change rapidly. Still, this has me wondering: is 2024 the year we can (finally!) breathe a collective sigh of relief?

With this question in mind, I’m happy to share AgileOne’s Workforce Solutions Market Overview: February 2024 Edition. Part of our expanding body of labor market research, it combines the latest economic data and insights from around the world with leading workforce solutions. it’s one of my favorite tools to share with clients because it’s true to our name, offering recommendations that are responsive to the economic climate yet agile enough to withstand global market shifts. It’s a must-read for leaders in just about any industry.

Here are five key takeaways from our report focused on helping companies succeed — no matter the circumstances:

1. From the rise of AI to economic fluctuations, one-in-four jobs is expected to see movement by 2027. Seeking to navigate these changes, more companies are opting for contingent hiring for its appeal to workers and cost-effectiveness. In fact, by 2050, up to half of the U.S. workforce could become contingent.
2. The COVID-19 pandemic heightened the focus on closing skill gaps, with 58 percent of respondents in a McKinsey Global Survey prioritizing workforce reskilling and upskilling in response to new workplace norms and labor market tightness. AgileOne offers support through its Managed Services Program (MSP), providing hiring managers with valuable workforce insights and data for informed hiring and skill development decisions.
3. Corporate culture is a key factor in determining employees' workplace choices and retention, yet only 2 in 10 employees feel connected to their company's culture. To remain competitive, employers need to focus on creating a desirable work environment through open communication, employee engagement, value alignment, and investment in professional development and team-building activities.
4. Companies globally are prioritizing diversity, recognizing it as a strategic advantage in accessing a broader talent pool amidst labor market tightness. Studies show that embracing workforce diversity not only aligns with ethical business practices but also enhances business performance in areas like work ethic, productivity, quality, engagement, attendance, and innovation.
5. Technology continues to drive change — especially in the workforce solutions industry. At AgileOne, we simplify the selection and integration of more than 450 technologies for talent attraction and management, offering a unified suite that includes vendor management, statement-of-work processes, and compliance tools. Additionally, our team specializes in emerging technologies like artificial intelligence, guiding businesses of all sizes in understanding the full spectrum of benefits and risks.

When it comes to the labor market, change is hard to predict. Mixed signals in the global economy coupled with shifts in worker habits and expectations have created an environment of uncertainty where companies have a lot to lose by being uninformed.

As we move deeper into the new year, it’s never been more important to have a partner you can trust at your side. That’s why we offer AgileOne’s Workforce Solutions Market Overview. It’s free to access and available to everyone, regardless of whether you are an existing client or not. That’s just one way we’re living up to our saying: #TogetherWeWin.

Download AgileOne’s Workforce Solutions Market Overview, February 2024 Edition here.